India’s Central Bank (RBI) has ordered commercial banks to not in any way hamper crypto trading in a new circular.
“It has come to our attention through media reports that certain banks/ regulated entities have cautioned their customers against dealing in virtual currencies by making a reference to the RBI circular DBR.No.BP.BC.104/08.13.102/2017-18 dated April 06, 2018,” the bank said before adding:
“Such references to the above circular by banks/ regulated entities are not in order as this circular was set aside by the Hon’ble Supreme Court on March 04, 2020 in the matter of Writ Petition (Civil) No.528 of 2018 (Internet and Mobile Association of India v. Reserve Bank of India).
As such, in view of the order of the Hon’ble Supreme Court, the circular is no longer valid from the date of the Supreme Court judgement, and therefore cannot be cited or quoted from.”
RBI said banks can carry out the usual AML/KYC requirements, but can not go beyond that in cautioning or preventing customers from exchanging fiat to cryptos.
This makes it the first time a central bank has given such order more than a year after India’s Supreme Court quashed a diktat preventing crypto trading following fierce battles at court.
Crypto trading is now booming in India which has the potential to rise as a crypto hot spot for the entire continent following crypto hostilities from China.
The regulatory situation however remains a bit uncertain in India as rumors occasionally prop up of the government there planning to take this or that action.
After the victory in court, however, any such action would have to be taken in Parliament, and that would be quite a battle if any proposal is hostile.
Where official ministerial statements are concerned, they generally appear to be accommodative so far, with it probable India will follow the approach of Europe and America in regulating cryptos, and so effectively opening India for investment.